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HQ W231330





August 20, 2007
DOCUMENT-NO: LIQ-15 OT:RR:CTF:ER W231330 DCC CATEGORY: Protest
Customs and Border Protection
Protest Office
1717 Poydras Street, Suite 1700
New Orleans, LA 70112
RE: Protest Number 2002-05-100867; 19 U.S.C. § 1504(d); antidumping duty; suspension of liquidation; deemed liquidation; liquidation by operation of law; International Trade Co. v. United States (281 F.3d 1268 (Fed. Cir. 2002)); liquidation instructions Dear Sir or Madam:
On February 15, 2006, your office forwarded the above-referenced Protest to the Office of Regulations and Ruling for further review. We have considered the points raised by your office and the Protestant. Our decision follows. FACTS:

The subject merchandise involves certain color televisions manufactured in the Republic of Korea (“Korea”) by Samsung Electronics Co., Ltd.. The televisions sets were entered on January 2, 1987 by the Protestant, Samsung America, Inc. (“Samsung”), under Entry Number 110-xxxxx39-5. On June 10, 2005, CBP liquidated the entry and assessed additional duties, fees, and interest charges as follows:

Regular (Column 1) Duties: $40,466.85
Dumping Duties: 1,584.00
Merchandise Processing Fees (“MPF”): $400.00 Interest pursuant to 19 U.S.C. §1505(c): $151,754.37 Interest pursuant to 19 U.S.C. §1505(d): $960.01 Total: $195,165.23

According to Samsung’s protest, the merchandise was covered under Line Item 687.3518, Tariff Schedule of the United States (“TSUS”), and dutiable at 15% ad valorem, the Column 1 rate at the time of entry.

On April 30, 1984, the Department of Commerce (“Commerce”) published a notice that set the weighted-average antidumping duty margin for Samsung at 15.95%. See Notice of Antidumping Duty Order Concerning Color Television Receivers from Korea, 49 Fed. Reg. 18,336 (April 30, 1984). That notice also noted the requirement for payment of a cash deposit of estimated antidumping duties for consumption entries made on or after the date of publication of the Federal Register notice.

Commerce announced, on May 20, 1987, the initiation of an administrative review of the antidumping duty order on color televisions from Korea for the period April 1, 1986, through March 31, 1987, (the “Fourth Administrative Review”), which covered the period of the subject entry. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 52 Fed. Reg. 18,937 (May 20, 1987).

The Preliminary Results of the Fourth Administrative Review were published on December 5, 1989. See Color Television Receivers from Korea; Preliminary Results of Antidumping Duty Administrative Review, 54 Fed Reg. 50,258, (Dec. 5, 1989). Although Commerce ultimately determined Samsung’s margin of dumping was de minimis, the notice of April 30, 1984 required estimated dumping duties to be deposited at the time of entry.

According to the December 5, 1989 Preliminary Results, Commerce determined the dumping margin for Samsung to be 0.25%. That notice also states:
a cash deposit of estimated antidumping duties based on the above margins shall be required for all firms except Samsung . . . . Since the cash deposit rate for Samsung . . . is less than 0.5 percent and, therefore, de minimis for cash deposit purposes, the Department shall not require a cash deposit of estimated antidumping duties for these firms. . . . These deposit requirements are effective for all shipments of Korean color television receivers entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this administrative review.

On June 27, 1990, Commerce published the Final Results of the Fourth Administrative Review. See Color Television Receivers from the Republic of Korea; Final Results of Antidumping Duty Administrative Review, 55 Fed. Reg. 26,225 (June 27, 1990). According to the Final Results, Commerce set the cash deposit rate for Samsung at 0.45% for the period of review.

On September 21, 1994, the U.S. Court of International Trade (“CIT”) remanded to Commerce for redetermination the Final Results of the Fourth Administrative Review for Samsung. See Samsung Electronics Co., Ltd. v. United States, 18 C.I.T. 891 (1994).

On January 30, 1995, Commerce submitted to the CIT the Final Results of Redetermination. On March 15, 1995, the CIT issued a second order remanding to Commerce the January 30, 1995 Final Results of Redetermination. See Zenith Electronics Corp. v. United States, 19 C.I.T. 377 (1995). On April 14, 1995, Commerce submitted the Second Final Results of Redetermination to the CIT.  

On May 31, 1995, the CIT affirmed Commerce’s Second Final Results of Redetermination. See Zenith Electronics Corp. v. United States, 19 C.I.T. 801 (1995). Because the CIT’s ruling was not appealed within 60 days to the Court of Appeals for the Federal Circuit, the CIT’s decision affirming Commerce’s redetermination became final and conclusive on July 30, 1995. See 28 U.S.C. § 2645(c) (1988); Fed. R. App. P. 4(a)(1)(B).

On December 7, 1995, Commerce published notice of the Amended Final Results for the Fourth Administrative Review. See Color Television Receivers from the Republic of Korea; Amended Final Results of Antidumping Duty Administrative Review, 60 Fed. Reg. 62,824 (Dec. 7, 1995). That notice states:

Because the CIT’s decision affirming our redetermination has become final and conclusive, the Department [of Commerce] will order the immediate lifting of the suspension of liquidation and instruct the U.S. Customs Service to assess antidumping duties on entries subject to this review, as appropriate. Individual differences between foreign market value and U.S. price may vary from the percentage stated above. The Department will issue appraisement instructions concerning these entries directly to the U.S. Customs Service

60 Fed. Reg. 62,824.

This notice also reported the revised weighted-average margins for Samsung are as follows: Manufacturer / exporter
Percent margin
Samsung
0.29

On July 7, 1996, Commerce issued instructions to liquidate the subject entry in message number 6213114. This message states that it is relevant to case A-580-008, for color televisions entered between April 1, 1986, and March 31, 1987. In relevant part, this message states:

1. For all shipments of complete color television receivers (CTVs) from Korea produced by Samsung Electronics Co., Ltd. (Samsung), imported by Samsung Electronics America, Inc. (SEA), or Samsung International Inc. (SII); (collectively Samsung), entered or withdrawn from warehouse for consumption during the period April 1, 1986 through March 31, 1987, assess an antidumping liability of $0.30 per CTV.

3. These instructions constitute the immediate lifting of suspension of liquidation of entry summaries for the merchandise and period listed above. You shall continue to collect cash deposits of estimated antidumping duties for the merchandise at the current rates.

On June 10, 2005, the port liquidated the subject entries with accrued interest of $151,754.37. The entry was filed electronically on January 2, 1987. No paper entry records are known to exist. According to CBP’s Automated Commercial System (“ACS”), the electronic entry record indicates that no estimated ordinary (Column 1, HTSUS) or antidumping duties were deposited at the time of entry. In addition, there is no evidence in the ACS records that Samsung asserted that the entry was subject to antidumping duties. Based on corrections to the ACS records, the goods were entered originally as a consumption entry (entry type code 01). This record was subsequently corrected by Customs personnel to indicate that the entry was in fact an antidumping entry (entry type code 03). Despite the correction, the merchandise was released without the deposit of estimated ordinary duties or dumping duties according to the ACS records.

Samsung argues that pursuant to 19 U.S.C. 1504(d) (1993), CBP should have liquidated the subject entry within six months after receiving notice of removal of the suspension of liquidation from the U.S. Department of Commerce (“Commerce”). Because CBP failed to liquidate the entry within six months as required, Samsung claims that the entry must treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record. Samsung further claims that other all duties and fees were paid at the time of entry.

ISSUE:

Whether the entry deemed liquidated as entered pursuant to 19 U.S.C. § 1504(d) (1993).

LAW AND ANALYSIS:
We note initially that the instant Protest was timely filed, i.e., within 180 days of the liquidation of the entry. Under 19 U.S.C. § 1514(a), “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . shall be final and conclusive . . . unless a protest is filed in accordance with this section.” The port liquidated the subject entry on June 10, 2005, and Samsung filed this Protest on September 2, 2005. Also, pursuant to § 1514(a)(5), the matter protested—the liquidation of the subject entry—is subject to protest.

Customs suspended liquidation of the subject entry while Commerce conducted the administrative review of the applicable antidumping order, A-580-002. The liquidation was further suspended while the Final Results of the Fourth Administrative Review were challenged before the Court of International Trade and subject to two remands for redetermination by Commerce. Ultimately, on May 31, 1995, the CIT affirmed the second final results of redetermination. When none of the parties to the litigation further challenged the CIT’s ruling affirming Commerce’s second final results of redetermination, the redetermination became final. Samsung argues that the entry was liquidated by operation of law on or about June 6, 1996, pursuant to 19 U.S.C. § 1504(d) (1993), six months after Commerce published the Notice of the Amended Final Results of the Fourth Administrative Review in the Federal Register on December 7, 1995. Samsung further claims that because the entry was deemed liquidated before the Customs rate advance and liquidation, no additional regular or antidumping duties are due.

The issue of whether the subject entry was deemed liquidated is governed by section 504(d) of the Tariff Act of 1930, codified at 19 U.S.C. 1504(d). Because the deemed liquidation statute has been amended several times by Congress, and because the statute has been the subject of several legal challenges, we must determine which version of the statute applies to this case before analyzing whether the entry was liquidated by operation of law.

Congress amended section 1504(d) in 1978, in order to limit the length of time Customs could take to liquidate an entry. See § 209(a), Pub. L. 95-410, 92 Stat. 902. Congress originally imposed a maximum four-year time period for liquidation, starting from the date of entry, and a ninety-day time period in which Customs could liquidate entries following the lifting of a suspension of liquidation. The 1978 version of section 1504(d) created an anomaly that “made deemed liquidation available if suspension of liquidation were removed before the expiration of the maximum four-year period for liquidating entries, but not if suspension of liquidation were removed after the expiration of the four-year period.” International Trading Co. v. United States, 281 F.3d 1268, 1272 (Fed. Cir. 2005) (citing Dal-Tile Corp. v. United States, 829 F. Supp. 394, 398 (Ct. Int’l Trade 1993)).

To address this anomaly in the 1978 version of the liquidation statute, Congress amended the liquidation statute in Title VI of the North American Free Trade Agreement Implementation Act (commonly referred to as the “Customs Modernization Act”). See § 641(2), Pub. L. 103-182. The statute, as amended in 1993, directs Customs to liquidate an entry within six months after receiving notice of removal of a suspension of liquidation. Furthermore, Customs was directed to treat any entry not liquidated within that six-month period as having been liquidated at the rate of duty asserted at the time of entry by the importer of record.

Following enactment of the Customs Modernization Act, section 1504(d) was further amended on December 8, 1994 by striking the phrase “When a suspension” and inserting the phrase “Except as provided in section 1675(a)(3) of this title, when a suspension.” See Uruguay Round Agreements Act, Pub. L. No. 103-465, 108 Stat. 4809, 4864, § 220(c)(2). The 1994 amendment applied to administrative reviews initiated, pursuant to 19 U.S.C. 1675, after the enactment of the Uruguay Round Agreements Act on January 1, 1995. Because the underlying administrative review was initiated before January 1, 1995, the 1994 amendment does not apply to the subject entry. Section 1504(d) was further amended on October 11, 1996 with the enactment of the Miscellaneous Trade and Technical Corrections Act of 1996, Pub. L. No. 104-295, 110 Stat. 3514, 3516, § 3(a). Although Congress applied the 1996 amendment retroactively to December 8, 1993, the modifications are not addressed here because they do not affect the analysis in this case.

The first question presented is whether § 1504(d) as amended in 1993 applies to effect the liquidation of the subject entry by operation of law six months after Commerce published the Amended Final Results in the Federal Register on December 7, 1995, even though the underlying entry and administrative review occurred before the date of enactment.

In American Permac, Inc. v. United States, 191 F.3d 1380 (Fed. Cir. 1999), the Court of Appeals for the Federal Circuit addressed the retroactive application of the 1993 amendment to § 1504(d). The Federal Circuit noted that the, “determination of whether a statute’s application in a particular situation is prospective or retroactive depends upon whether the conduct that allegedly triggers the statute’s application occurs before or after the law’s effective date.” American Permac, 191 F.3d at 1381 (quoting Travenol Labs., Inc. v. United States, 118 F.3d 749, 752 (Fed. Cir. 1997). Given the fact that several events related to American Permac’s entries—including the removal of the suspension of liquidation, issuance of liquidation instructions, liquidation of the entries, as well as the running of the six-month period described in § 1504(d)—occurred more than four years before the 1993 amendment, the court held that application of that amendment would constitute an impermissible retroactive application of the statute.

The CIT has also addressed the application of the 1993 amendment to § 1504(d) in American International Chemical, Inc. v. United States, 387 F. Supp. 2d 1258 (Ct. Int’l Trade 2005). In American International, the court considered whether the 1993 amendment should apply to the question of whether an entry was liquidated by operation of law when all of the events that determine the respective rights of the parties under § 1504(d) occurred after the effective date of the 1993 amendment. Specifically, the court noted that Customs had received notice that the suspension of liquidation was no longer in effect, and the entire six-month period following such notice had run. Based on these facts, the court concluded that § 1504(d) as amended in 1993 applied to the entries at issue, and that such application is not retroactive.

In the present case, the significant pre-liquidation events—including the removal of the suspension of liquidation on July 30, 1995; the publication of the Amended Final Results for the Fourth Administrative Review in the Federal Register on December 7, 1995; and the issuance of liquidation instructions by Commerce on July 7, 1996—all occurred after the 1993 amendment became effective on December 8, 1993. Based on the reasoning in American Permac and American International, we find that § 1504(d), as amended in 1993, applies to the subject entry.

The relevant provision of the 1993 version of the deemed liquidation statute, 19 U.S.C. § 1504(d) (1993), provides: When a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry, unless liquidation is extended under subsection (b), within 6 months after receiving notice of the removal from the Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry “(other than an entry with respect to which liquidation has been extended under subsection (b))” not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record. Pursuant to 19 U.S.C. 1504(d), Customs should have liquidated the subject entry within six months of receiving notice of the removal of the suspension of liquidation from Commerce. Commerce published the notice of the Amended Final Results for the Fourth Administrative Review on December 7, 1995. Because Customs did not liquidate the entry within six months of that notice, the entry was liquidated by operation of law on June 6, 1996. See International Trading Co. v. United States, 412 F.3d 1303 (Fed. Cir. 2005) (Six-month period for deemed liquidation of entries subject to an administrative review of an antidumping duty order is triggered when Commerce publishes its final results of administrative review in the Federal Register, even if Commerce later issues explicit liquidation instructions to Customs.)

The question of whether the protestant paid duties upon entry is factual. Samsung claims that it paid all required duties and fees at or about the time of entry. Samsung, however, is unable to provide any proof of payment after searching for such records internally and externally through its bank, accountant, and customs broker. Aside from ACS printouts, actual entry and payment documents are not available from Samsung or CBP, and may not longer exist.

With regard to the ACS documentation, Samsung claims that two of these printouts indicate that the company paid duties at the time of entry. Two of the ACS printouts (queries ENAM and ENXM) include the notation “single payment.” In addition, Samsung claims the Entry Archive File Query printout (ENXI), which notes “fully paid,” indicates that any duties owed were paid. Samsung also points out that there was an Automated Broker Interface (“ABI”) transmission three days after the date of entry on January 5, 1987. According to Samsung, the “single payment” notation on the ENAM and ENXM queries, and the ABI transmission shortly after the date of entry is evidence that the duties owed were paid on January 5, 1987.

Samsung further argues that the failure of importers to pay duties ordinarily triggers other collection efforts, such as notice to the importer’s surety, proceedings against the importer’s bond, and denial of immediate delivery privileges. According to the protestant, Customs’ failure to attempt a timely collection of duties owed by Samsung is inconsistent with agency’s internal collection procedures and the claim that the company failed to pay any duties and fees owed.

We find that the evidence does not support the protestant’s claim that the Samsung paid all fees and duties required at the time of entry. First, the “fully paid” notation on the ENXI query simply indicates the duties owed based on what the importer asserts at the time of entry. In this case, the ENXI printout shows that subject merchandise was entered as Code “01” (dutiable consumption entry) rather than rather than as Code “03” (ADD consumption entry). Because Samsung apparently declared no duties owed at the time of entry, ACS automatically indicated the entry was “full paid” because the amount paid was the same as the amount paid.

With regard to the notation “single pymt” on the ENAM and ENXM printouts, this information, which appears in the pay basis data field, merely indicates the form of payment if any taxes, duties or fees are owed. “Single pymt” is the indicator used to specify that payment is to be made by check, assuming a payment is owed. Consequently, the notation “single pymt” does not indicate that any payment was actually made on the subject entry.

Based on available information in the ACS records, it appears that Samsung asserted that no duties, taxes or fees were due at the time of entry. Because the entry liquidated by operation of law on June 6, 1996, and because the importer asserted no duties, taxes or fees at the time of entry, the entry is deemed liquidated as entered by the protestant.

We note, however, that the protestant may be required to pay duties, taxes, and fees pursuant to 19 U.S.C. § 1592(d), should you determine that Samsung underpaid lawful customs duties, taxes and fees, regardless of whether a monetary penalty is assessed.

HOLDING:
The Protest should be GRANTED. The entry liquidated on June 6, 1996 by operation of law as entered pursuant to 19 U.S.C. § 1504(d) (1993) six months after the Department of Commerce published its notice of the Amended Final Results for the Fourth Administrative Review on December 7, 1995.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the claim in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,


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